One of the biggest questions companies will ask when deciding on a third-party logistics company in southern California is, “how much is this going to cost?” Unlike a buy/sell transaction, asking that question is considerably more complicated.
Before you decide on which company to use, conduct an analysis of exactly what supply chain services your company needs, and how much of each.
Will you be outsourcing everything, or just a part of your supply chain, like transportation? Will you be using all of their services, and concentrating on the research, design, and operations side of your business? Does your ideal company offer complete supply chain outsourcing, including order packaging and call center services?
Once you’ve decided on what you want to outsource, it’s time to talk to 3PL companies. Each company is different, and so is their fee schedule. It’s important to understand what each of them can offer your company, what they will charge, and how their fee schedules are structured.
Routine Charges For 3PL Order Fulfillment
3PL companies in Southern California vary widely in the amount and the types of charges they quote customers, so it may be difficult to do an apples-to-apples comparison. But with most companies, these are charges that are usually standard to any provider contract:
- Setup fees (also called “onboarding”)—this covers initiation of your account, integration into the 3PL’s system and the activation of your company’s shopping cart.
- Receiving—when your shipment arrives at the warehouse, it’s unloaded, unpacked, counted, inspected and labeled.
- Storage—this is usually charged on a per-pallet basis, and may include a square foot/cubic foot charge as well. Many are temperature controlled to prevent damage to the product. This is usually factored on a monthly basis.
- Order fulfillment (also called “pick-and-pack”)—some providers also charge per item that’s picked and added into a shipment. Some don’t, or have a minimum number until they charge. Be aware that some companies also charge for packing materials, and some don’t. Some companies may quote a lower fulfillment rate, but charge a higher rate elsewhere (such as packing materials.)
- Shipping—shipping your packed order to your customer. This may include freight and logistics charges as well as parcel charges. Most companies can get a better rate, and are able to offer a discount from what’s published, so your company can really save here.
Additional 3PL Charges
Some companies offer a wider range of services, including:
- Custom packaging—Boxes, envelopes, shipping paper and other generic items may be included in the packaging price, but your company may wish to use branded packaging for shipments. Companies will generally charge extra if you decide to supply custom packaging.
- “Kitting” charges—kitting refers to a specific way in which items are arranged, assembled or packaged prior to shipping. These fees vary from client to client due its unique nature.
Custom services may also cost more, so you’ll have to ask for more information.
Outsourcing to a 3PL company in California may take some time to get started, and the cost savings won’t be immediately visible. But over time, handing over the mechanics of your supply chain can, in the long run, make your company leaner and more cost efficient.
Contact 3PL WorldWide For Your Supply Chain Needs
Outsourcing to 3PL WorldWide helps you concentrate on what you do best—growing your company, creating new products and services, and increasing your customer base.
Not only do we have warehouses in both Southern California and Connecticut for bi-coastal warehousing, but we also offer a complete supply chain outsource experience, including call center services, customer service, logistics, and technical support. Contact us at (888) 456-1920 or use our online contact form.